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Interview of MTO Management with Jay Taylor & Al Korelin |
Special
Advisory/Update:
Metanor
Resources Poised for Significant Upside Revaluation
Now is the time to pay attention
to MTO.V shares as the current valuation is making upward
adjustments to reflect forward discounted future revenues of Metanor as a gold producer with a solid expandable resource base
in a mining friendly region.
The newly refurbished mill is
currently producing at over 800 TPD
and will increase capacity over time. With recent spot price of
gold at >$CDN1,200/oz, MTO.V is experiencing significant
positive cash flow from low cost production (and costs
should be significantly lower when high grade Bachelor Lake gold
comes online). Production in 2009/10 should conservatively come
in a 50koz., and
Mining MarketWatch notes that Metanor is able to readily upgrade and
tweak up to 1200 TPD when appropriate (generating ~70K ounces/yr).
Management has been impressive in
its ability to execute upon plans to achieve this milestone, Metanor now sits
with no long term debt, in excess of $140M in 100% owned
infrastructure (replacement value), and in a cash flow positive production
mode. With ~104M shares outstanding and trading under
CDN$0.60/share, the market cap of MTO relative to its resource
base/production expansion plans and future revenues make MTO.V
among one of the most attractive vehicles for gold investors.
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Interview with
Ronald Perry, VP & Treasurer of Metanor Resources Inc. on
April 3, 2009
Q. 1 Mining MarketWatch:
I understand you have had a huge vote of confidence in Metanor
through your recent private placement offering.
Ronald Perry, VP & Treasurer Metanor:
"With regards to the closing of the recent
private placement, we are very pleased to have on board Sprott
Asset Management who subscribed to 20M shares, CDN$10M of the
$12.2M offered. Additionally, we are pleased to note Goodman and
Company had acquired another 450K shares at market during the
month of February. Subsequent to that, Goodman and Co. entered
into the private placement offering, subscribing to an
additional 3.1M shares bringing their holdings up to 14.35M
shares of MTO.V. Combined holding of MTO.V shares by Sprott
Asset Management and Goodman and Co. is now aprx. 34M Shares;
Metanor Resources is now 1/3 owned by two of the largest and
most prestigious investment institutions in Canada…. two
institutions that like gold."
Q. 2 Mining MarketWatch: What type of expenditures are
coming up to get the mill and underground to where you want it
to be, could you have done it on cash flow alone, and I assume
you are capitalized well enough now to get to where you want to
be?
Ronald Perry, VP & Treasurer Metanor:
"With regards to the mill upgrades
necessary to get where we want to be -- the key is we can now
proceed, we can now go and issue contracts and we don’t have to
worry about whether we will have the money – we have it. When
you operate a business do you want to take the risk? - Not
knowing where the capital markets will be. We can’t count on
cash flow. What we did was the prudent thing. It is dilutive,
but look what we’re bringing onboard with Eric Sprott and
Goodman & Company. We are currently at 800TPD and are taking it
to the next stage. We raised CDN$12M, we had a ~CDN$2M on hand
and we still have a line of credit available. We budgeted CDN$5M
to take the mill from 700 to 1200TPD, we did do from 700TPD to
800TPD for well under $100K so we don’t think we will be using
the full $5M. We are going to do the headframe at ~$1.5M, hoist
room ~$1.5M, the shaft sinking budget for 2009 will be about
$4.5M, other work at Bachelor is about $3M. We have money
available to do all this work now and we will proceed to award
contracts. We pride ourselves on improving on consultant
estimates and budgets and always try to do so; one of the
contracts was about $1.5M and we are going to be awarding it for
about $1M plus taxes. The point of doing things the way we did
is that it secures our future. Going from cash flow alone to
progress underground we wouldn’t be awarding all these contracts
as it would have taken much more time, and we felt the time is
‘now’."
Q. 3 Mining MarketWatch: Where exactly do you see Metanor
‘production wise’ when the upgrades and improvements are
finished and by when?
Ronald Perry, VP & Treasurer Metanor:
"The PP funds allow us to proceed
with our plans; progress underground and bring our mill up to
1200TPD, process the high grade ore from the Bachelor
underground mine at conservatively ~7g/t and blend with the
3+g/t ore from the Barry open pit deposit. We are being
conservative in saying an average of 5-6 g/t at 1200TPD 94%
recovery will get us close to 70,000 ounces gold per annum, with
a blended direct cash cost of ~US$458 - this should be in about
14 months from now, by July, 2010."
Q. 4 Mining MarketWatch: Will the mill continue to
operate, producing gold, adding to cash flow 24/7 the whole
interim improvement period?
Ronald Perry, VP & Treasurer Metanor:
"We are under a constant
improvement/upgrade program during this period. We are building
for the future and adjusting on the fly, which means from time
to time as we tweak the mill we can not run at 100% efficiency
and capacity, but in a about a year from now we will be finished
with the mill and running exactly where we said, at 1200TPD and
well over 65,000 ounces. The mill always runs, the efficiency
and capacity depends how much work we are doing on it. We do
have cash flow."
Q. 5 Mining MarketWatch: What is coming up at Barry?
There is a lot of crushed rock that appears ready to go.
Ronald Perry, VP & Treasurer Metanor:
"It is an investment for the future; we
are thinking always to blend and control the grade and control
the cash flow for the future. We stock piled 300,000 tonnes,
under 2g/t, already crushed and ready for transportation at
Barry, that is almost a years supply. The goal here is to blend
it, not only with Bachelor but we are blending with Barry ore as
well, we do have higher grade; we did have those drilling
programs where we got 6.12g/t over 36m. We need more drilling,
Barry has a 4km strike zone - We ended our drilling program in
the previous year early at 9,000m of a forecasted 15,000m as we
were not going to drill for drilling sake. We had a backlog of
information coming from our lab and exterior labs so the
Director of Exploration, Andre Tremblay, CEO Serge Roy, and
President Ghislain Morin put the project on hold. We did not
want to spend money without knowing where we are going. The
drill is back on site now at Barry. We will be drilling in the
area of the 6.12g/t and behind the bench where we are presently
mining; we want to go forward to see where that goes. Also we
will be investigating that 580 g/t channel sample area as well.
We will have some information probably in the coming weeks.
Perhaps in the coming months we will be in a position to mix
some of that 6.12 g/t grade Barry ore."
Q. 6 Mining MarketWatch: So 70,000 ounces per annum is
not far off then – are you on plan?
Ronald Perry, VP & Treasurer Metanor:
"We are on plan and on budget. We are
on target for what we said 3 years ago; the plan was to go
underground at Bachelor after about a 1 year – 1.5 years at
Barry. We are just over a year now, it was always the plan. Look
at were we will be in 14 months, its all coming together."
Figure 1. Metanor's refurbished
Bachelor Lake Gold Mill - now in production
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Metanor Resources
Inc.
TSXV-MTO
Metanor Resources Inc. is an
advanced stage development and exploration mining company listed on the TSX
Venture Exchange (ticker symbol
MTO.V).
Metanor has come to our attention due, in part, to the extraordinary
opportunity afforded investors as a gold producer
utilizing their 100% owned Bachelor Lake Gold Mill in the
prolific Abitibi Mining District of Quebec.
 Metanor
now has the Bachelor Lake Gold Mill functioning and processing the ore
extract from the open pit operation on their Barry gold deposit
(located approximately 65 km southeast of the mill).
Primary crushing is done on-site, with secondary
crushing and refining at the Bachelor Lake facility. The Barry property
boasts a highly efficient ore-to-waste ratio of only 1:1.
 Initial cash flow from production will be
used to expand the resource base at the Barry Deposit
and further develop the enormous potential at the Bachelor Lake Gold
Mine which produced over 131,000 oz of gold during the 1980's, it
currently has resources of 300,000 oz Au and is open in all directions
at depth with plans to upgrade to 1,000,000 oz.
According to Metanor's President, Ghislain Morin, current depth of the
shaft at the Bachelor Lake Gold Mine is 1,700 feet, the shaft will be
sunk an additional 600 feet to a depth of 2,300 feet and a 20,000 meter
drill program is expected to add an additional 700,000 ounces of
resources. Mr. Morin has many years of mining
experience with an expertise in both underground development and shaft
sinking. Prior to joining Metanor Resources, Mr. Morin built mills for
several area miners including Cambior (now owned by Breakwater), Aur
Resources and BHP Billiton. The two main veins at the Bachelor Lake Gold
Mine run parallel and are 75 feet apart at an 80
degree angle. Metanor expects to drop shaft an additional 700 feet in
the near future and the potential is in place to identify 1.5 million
ounces going forward. Area miners such as Aur Resources (now Teck
Cominco), Agnico-Eagle and Sigma are currently mining at depths of between 5,000 and
8,000 feet. The gold grade at the Bachelor Lake property increases at
depth and the strike is open in all directions at the 2,300 foot mark.
Metanor will also acquire
advanced projects near the Bachelor Lake Mine and capitalize on their
good fortune of being the sole mill within a 100 km radius in an area
that contains in excess of 1.5M oz of gold from various entities. MTO
has an additional 100,000 oz (historic non NI43-101 compliant) gold on
their Hewfran extension and recently acquired gold properties (63
adjacent claims) contiguous to Bachelor Lake which hosts the once
producing (until 1967) Coniagas Mine. Metanor's Hewfran property,
adjacent to the Bachelor mill property, is also the subject of new
resource expansion; See Feb 12,
2009 release "NEW
DISCOVERY CONFIRMED" -- The results indicate that the mineralized
Hewfran West zone, directly adjacent to Metanor's 100% owned Bachelor
Lake Gold Mill and Mine, is continuous from surface to 180m elevation
below surface where resources were evaluated in 2005. Hewfran and the
Bachelor Lake Mine are connected underground. Bachelor Lake Mine’s 6th
and 8th gallery are part of Hewfran and these new results indicate
economic grade potential for mining via surface open pit or decline type
mine on the extension.
As of February 2009, the Bachelor mill is
currently operating at an increased capacity of over 800 tons per day (tpd)
and has poured more than 20,000 oz. of gold to date. An ongoing
efficiency improvement plan is in place to raise the production to
1000tpd very quickly. Metanor has commenced work to go underground at
Bachelor Lake towards the development of the Hewfran section via level 6
and 8 where there are proven reserves. The shaft rehabilitation is in
process, the shaft is totally dewatered to 1,700 feet. A crew is
diligently working on changing the guides, wall and hand plates,
refurbishing the rock catcher and landry. Further, they are also
changing stairs in the man-ways.
Metanor also has several other properties
of significance including their Dubuisson property which precipitated
MTO becoming a publicly traded entity in 2003. The Dubuisson property
lies within the city limits of Val-d'Or, Quebec, where 9,000 m of
exploratory drilling has confirmed a measured, indicated, and inferred
resource of over 450,000 ounces of NI 43-101 compliant gold. This
property alone is a significant plum, however it is important to note
that Metanor's flagship and main focus is their 100% owned Bachelor Lake
Property; the exceptional revenue generation from the mill and vast resource base of the gold mine.
|
 MarketWatch
Undervalued Opinion:
MTO.V appears to be an exceptional buy. Production in 2009/10 should
conservatively come in at 50koz+. The mill is
configured to produce dore bars of gold, with a small
component of silver.
Additionally MTO currently trades under CDN$0.60 per share and has a current
market cap that equals value of their Bachelor Lake Gold Mill structure
alone (with a replacement value of
$140M including headframe, roads, and all surface equipment). Metanor possesses
known gold resources between the Barry Deposit and Bachelor Lake of over
470,000 oz + over 100,000 oz historic at the Hewfran extension but more
importantly the Bachelor Lake Gold Mine has a proven geological model
that is open in all directions at depth with plans to upgrade to
1,000,000 oz. They also currently have ~450,000 oz at the
Dubuisson property. ...With gold production now underway MTO.V appears to offer exceptional opportunity, their
forward looking EPS will likely be very significant as a debt free unhedged gold producer. The current market cap relative to expected
revenues is disproportionate; according to a recent (May 2009)
analyst report MTO is in line for a serious upside price change. |
Metanor’s tax credit incentives found in mining friendly Quebec :
Because of incentives offered by the government of Quebec, for every $1
that Metanor invests in underground development and exploration, they
will receive ~$0.46 in the form of a tax credit. Tax incentives will
benefit the company greatly, as plans include ongoing underground development and a exploration.
Metanor's Technical Leadership and Management:
-
Mr. Serge Roy, Chairman CEO, is a licensed professional
who has held key positions for such companies as Stabell Resources Inc.
and Ovaltex Consultant inc. (mining consultants and geological
engineers), has made has made key strategic decisions that have
maneuvered Metanor to a position of great strength in the region and is
well qualified to maximize shareholder value as Metanor transitions from
explorer to gold produce.
Mr. Ghislain Morin is President
& COO. Mr. Morin participated in many feasibility
studies with a view to implementation of mines, mining projects and
mining product installation companies. Between 1981 and 1989, he
founded Équipement Minier GRM Inc. for which he is now vice
president. Mr. Morin has been involved in planning, management,
monitoring, construction and evaluation of various mining projects
since 1974.
Andre Tremblay, Director of Exploration, holds a
bachelor's degree in geological engineering and a masters' degree in
earth sciences (structure) from the Universite du Quebec in Chicoutimi .
He's acted as a director of exploration and/or various senior geologist
positions with companies (as Ressources minieres Coleraine, GeoNova
Explorations, Gestion S.R.C. Inc., Groupe Minier O, Mines Camchib,
Campbell Resources Inc.).
|
For a full review of Metanor Resources Inc.'s
properties see the related URL's: |
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Bachelor Lake
Gold Mine & Mill
The Bachelor Lake property is Metanor's main
focus.
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Barry Gold
Deposit
The open
pit operation on MTO's Barry gold deposit will be processed at
Bachelor Lake.
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Dubuisson (Val-d'or)
The Dubuisson Property
is 432 hectars within the city limits of
Val-d'Or, Quebec, where 9,000 m of exploratory drilling has confirmed a
measured, indicated, and inferred resource of over 450,000 oz
gold. |
Whahnapitei (Sudbury)
The Wahnapititei Property
is 130 hectares in which diamond
drilling performed demonstrates the area is prospective to high grade
gold (7-15 g/t), along with significant amounts of cobalt and nickel.
Mineralized zones identified are located less than 5 km north-east of
the Nickel Rim South deposit, where Falconbridge is investing
over $368 million in underground development of its deposit and it is
already understood that mineralization from Falconbridge's property
extends into Metanor's. |
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Opinaca (Northern Quebec)
Holding Property;
4,827 hectares that lie about 30 km
south-southwest of Goldcorp's Eleonore gold property. Values on
nearby properties have gold values ranging from 6.02 g/t Au to
12.03 g/t Au over a 75 m strike length.
|
Vassan (Val-d'or)
Holding Property;
The property is located in a favorable geological
context for different types of mineralization, such as
auriferous in the veins inside the Vassan intrusive,
volcanogenic sulphides in the intermediate to mafic volcanic
sequences and of the platinoids type mineralization in the
ultramafic sequences of the Dubuisson Formation. |
Note: This list is not intended to be
a complete overview of Metanor or a complete listing of Metanor's projects.
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To have a complimentary
investor package on
Metanor Resources Inc . sent
to you
CLICK HERE |
For more information
contact Metanor Resources Inc.'s head office:
Ph (819).825.8678
E-mail:
info@metanor.ca
Company's web site:
www.metanor.ca
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